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Collaborative business modelling for systemic and sustainability innovations

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Abstract and Figures

Sustainability innovations are characterized by a systemic nature and require that multiple organizations act in an orchestrated fashion. To jointly identify opportunities and plan sustainability innovations, new methods and approaches are needed. In this article we describe a case study where 8 firms have collaborated to envision and create new business models in the energy industry. After describing this collaborative business modelling (CBM) approach, we discuss its strengths and limitations and compare it to two alternative methods of strategy and innovation planning: scenario technique and roadmapping. We find that CBM creates a powerful platform for (1) jointly identifying economic and societal value, (2) defining value creation/value capture systems, and (3) planning of complex and uncertain future markets.
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Int. J. of Technology Management, Vol. x, No. x, xxxx 1
Collaborative business modelling for systemic and
sustainability innovations
René Rohrbeck*
Aarhus University, Business and Social Sciences, Department of
Business Administration, Bartholins Allé 10, 8000 Aarhus, Denmark.
Lars Konnertz
Technische Universität Berlin, Straße des 17. Juni 135, 10623 Berlin,
Sebastian Knab
Universität Hamburg, Chair of Business Ethics and Management, Von-
Melle-Park 9, 20146 Hamburg, Germany.
Abstract: Sustainability innovations are characterized by a systemic nature and
require that multiple organizations act in an orchestrated fashion. To jointly
identify opportunities and plan sustainability innovations, new methods and
approaches are needed. In this article we describe a case study where 8 firms
have collaborated to envision and create new business models in the energy
industry. After describing this collaborative business modelling (CBM)
approach, we discuss its strengths and limitations and compare it to two
alternative methods of strategy and innovation planning: scenario technique
and roadmapping. We find that CBM creates a powerful platform for (1) jointly
identifying economic and societal value, (2) defining value creation/value
capture systems, and (3) planning of complex and uncertain future markets.
Keywords: New market creation, collaborative innovation, business model,
sustainability innovations, systemic innovations, collaborative business
This paper is a revised and expanded version of a paper entitled “How Collaborative Business Modelling Can
Be Used to Jointly Explore Sustainability Innovations” presented at ISPIM Annual Conference, 2011,
Hamburg, Germany
Electronic copy available at:
Collaborative business modelling for systemic and sustainability innovations 2
The need to move towards a more sustainable future is perceived by many as both
critical and imminent (Ulhoi & Madsen, 2009; United Nations Secretary-General's high-
level panel on global sustainability, 2012). Increasingly the need to become more
sustainable is also entering corporate board-room agendas and an increasing number of
firms are reporting that investing in sustainability measures pays off (MIT Sloan
Management Review & The Boston Consulting Group, 2012). However sustainability
innovations often consist of incremental enhancements within one organization, rather
than more radical innovations that create new markets and solve grand societal challenges
(de Boer & van Bergen, 2012).
The failure of economic agents (governments, non-governmental organizations, and
firms) to produce such radical innovations has been attributed to different factors. One
reason is that there is no expectation of a positive impact on their competitive advantage,
and therefore firms do not respond to the increasing stakeholder pressure (Garces-
Ayerbe, Rivera-Torres, & Murillo-Luna, 2012). This issue might improve over time as
more and more firms report on value creation through the implementation of
sustainability measures and eventually also through a change of mindset as Porter and
Kramer argue in their conceptual article (Kanter, 2011; Porter & Kramer, 2011).
Another reason is the complexity and uncertainty of creating a new economic system,
which is needed in many radical sustainability innovations. In that respect Johnson and
Suskewicz (2009) note that:
Conventional approaches to renewable energy are falling short. The
key is to shift focus from developing individual technologies to
creating whole new systems.
A third reason is the lack of confidence in the individual economic agents as to their
ability to get access to the specialized assets from other actors, that they need to
commercialize the innovation (Pinkse & Kolk, 2010). Thus, the more prudent strategy is
not to invest in the sustainable innovation opportunity.
In this article we present and discuss an approach where multiple firms have worked
together to identify, describe and evaluate business models in the field of smart energy,
i.e. in integrated and partly automated management of the supply side, the demand side
and the transportation of energy (Knab, Strunz, & Lehmann, 2010).
The challenge to create sustainability innovations
Sustainability innovation
We define sustainability innovations as
…inventions in technology, process or market that simultaneously
create economic and societal value. Societal value can be
differentiated in protecting the environment, ensuring economic
growth and advancing social well-being.
The complexity of sustainability innovations might in some cases be low, when for
example a new invention allows a firm to provide a child-care scheme to its employees.
Here, only two economic agents would be involved: (1) the firm and (2) the part of the
employees, who are parents. The innovation might raise the productivity of the parents,
create economic value for the firm and enhance the education and well-being of the
children, thus creating societal value. Such a service might be engineered and funded by
the firm and supplied for free. In such a case, the overall uncertainty attached to the
innovation is limited to the technical feasibility and thus perhaps so low that the firm can
take the risk alone.
Other sustainability innovations in the past, such as the introduction of electrical
lighting, have a considerably higher inherent complexity. Edison did not only need to
invent the technical design of the light bulb, he also needed to (1) invent the electricity
distributions system, (2) envision how to finance the installation of the infrastructure, (3)
overcome regulatory obstacles and survive the opposition of the kerosene-based lighting
industry (Johnson & Suskewicz, 2009).
The majority of sustainability innovations still takes the form of incremental
innovation (Hellström, 2007). However major sustainability goals, such as the European
Union’s objective to reduce greenhouse gas emissions by 80-95% until 2050 compared to
1990 is not achievable by incremental innovation (European Commission, 2011).
Systemic Innovation
This systemic nature of sustainability innovations (Dubosson-Torbay, Osterwalder, &
Pigneur, 2002; Paucar-Caceres & Espinosa, 2011) with many interdependencies between
the elements and complex architecture (Johnson & Suskewicz, 2009; Ulhøi, 2008) often
requires that multiple organizations work together and pool complementary assets (De
Laat, 1999; Miles, Miles, & Snow, 2006). Many expect that in the future more of these
networked innovation activities will take place (Berg, Pihlajamaa, Poskela, & Smedlund,
2006). To succeed, such networks need to create a shared vision with powerful
expectations that will allow mobilizing sufficient resources (McDowall & Eames, 2006;
Rohrbeck & Kallehave, 2012).
To envision future value chains, plan joint R&D efforts, forecast demand and
willingness to pay, a common platform for discussion among the actors is needed
(Probert, Farrukh, Gregory, & Robinson, 1999). Such a framework needs to be
comprehensive enough to touch all major issues, but if it becomes too detailed or
complex, it would prevent effective strategic discussions and consequently inhibit the
development of a common understanding and joint goals (Lichtenthaler, 2005). In
addition, it should also help to avoid the risk of over-emphasizing the technology
perspective of the innovation (Hanninen, 2007).
Managing sustainability innovations of a systemic nature
If sustainability innovations require that multiple actors work together, they will have to
adapt to some open-innovation principles to a certain extent (Chesbrough, 2003). In
open-innovation collaborations, organizations pool knowledge, technologies and other
assets and work together across industries and along the value chain (Chiou, 2011;
Lichtenthaler, 2011). Scholars report about a growing number of firms that open up and
Collaborative business modelling for systemic and sustainability innovations 4
introduce processes and mechanisms that allow them to work together with public and
private partners to create innovations jointly (Dodgson, Gann, & Salter, 2006; Rohrbeck,
Hölzle, & Gemünden, 2009). It can be regarded as a promising sign that one of the
requirements for creating sustainability innovations is thus being met.
Another requirement is that a suitable discussion and a framework for planning can
be found. When looking into innovation management methods, we identified three
candidates that can be expected to be particularly suitable to (1) deal with uncertainty, (2)
provide a holistic picture of future states, (3) provide a platform for collaborative
discussion and (4) serve as a framework for planning:
The scenario technique is known to successfully enable strategic discussions and
visioning (Chermack, van der Merwe, & Lynham, 2007; Visser & Chermack, 2009),
but less suited for detailed planning (Ringland, 2010).
Roadmapping has its strengths in planning (Phaal, Farrukh, & Probert, 2004c) and
decision-making (Petrick & Echols, 2004) as well as identifying interrelationships
between the market and the technology (Groenveld, 2007; Phaal, Farrukh, & Probert,
2004b; Thom, Rohrbeck, & Dunaj, 2010) and facilitating open innovation
(Lichtenthaler, 2008b).
Business modelling which allows discussions and visualizations of new value
creation/value capture systems on a conceptual level (Itami & Nishino, 2010; Teece,
2010) and works particularly well in uncertain, fast-moving and unpredictable
environments (McGrath, 2010).
Various authors have documented that roadmapping and the scenario technique can
successfully be applied by private companies, (Rice, Leifer, & O'Connor, 2002;
Ringland, 2010; Wells, Phaal, Farrukh, & Probert, 2004) in public R&D planning (Saritas
& Aylen, 2008) and in public-private research projects (Phaal, Farrukh, & Probert,
2004a). It has also been noted that the scenario technique is suited to create common
ground in a collaborative innovation setting (Cairns, Wright, Van der Heijden, Bradfield,
& Burt, 2006). Roadmapping has its strength in the coordination of different actors either
within the firm or with external partners (Phaal et al., 2004c). Used with external
partners, roadmaps allow the integration of open innovation processes, particularly to
support external knowledge exploitation (Lichtenthaler, 2008a).
Our proposition for the role of collaborative business modelling (CBM)
In this paper we want to report and discuss the role that collaborative business modelling
may play in discussing, inventing and planning sustainability innovations. For this paper
we define three key terms as follows:
A business model to be the logic and architecture of economic and societal value
creation and value capture system (Amit & Zott, 2012; Chesbrough & Rosenbloom,
2002; Siggelkow, 2002; Teece, 2010; Zott & Amit, 2010). It may allow a firm to
attain a competitive advantage and/or to create a new market (Storbacka & Nenonen,
2011; Thompson & MacMillan, 2010; Yunus, Moingeon, & Lehmann-Ortega,
Business modelling to be a creative and inventive activity that involves
experimenting (Chesbrough, 2010) with content, structure and governance of
transactions that are designed to create and capture value (Sosna, Trevinyo-
RodrÌguez, & Velamuri, 2010; Timmers, 1998; Zott & Amit, 2010).
Collaborative business modelling as an activity where multiple organizations that
might differ in type (industry, public research and non-profit), their position in the
value chain (manufacturing, service, etc.) and industry (energy, ICT, etc.) work
together to create a value creation system. In some cases, they will also attempt
jointly to create the value capture system.
We engaged in the study of collaborative business modelling with three expectations:
In order to create sustainability innovations that are complex and yield sufficient
value to create a new market, multiple actors need to act in an orchestrated fashion
(Johnson & Suskewicz, 2009). The need for coordination is particularly high in
innovation fields that cross industry boundaries and where a technological
convergence is occurring (Lei, 2000).
Developing new markets necessitates decisions and planning, while a high level of
uncertainty about key variables persists (Hacklin & Wallnöfer, 2012; Ruff, 2006). In
such circumstances, the ability to foresight and predict key developments with other
organizations will facilitate decision-making (Doz & Kosonen, 2010; McDowall &
Eames, 2006).
The business model framework and the graphical representation of the business
model canvas (Osterwalder & Pigneur, 2010) provide a particularly suitable platform
to experiment with alternative configurations of a business model (Chesbrough,
2010) and has a level of detail, which is effective for facilitating strategic discussions
and innovation planning.
These expectations also represent the hypotheses against which we will evaluate the
methodology in general and the case project in particular.
As a frame of reference, we used Osterwalder’s ontology of a business model
(Osterwalder, 2004). It consists of four “main areas”, which are broken down into a set of
nine building blocks (see figure 1). Since its introduction, it has been further developed to
a methodology designed for use in workshops or similar creative environments. It uses a
visualization concept in form of a canvas, which shows all relevant aspects of the
business model and facilitates joint editing and development (Osterwalder & Pigneur,
Collaborative business modelling for systemic and sustainability innovations 6
Figure 1: Building blocks of Osterwalder’s business model ontology and the “Business Model
Case study in the German smart energy market
Case setting
The German energy sector is changing due to liberalization, a pressure from the public
for more sustainability, new legislation and emerging technologies (Bouffard & Kirschen,
2008). These changes will lead to a market that is more flexible, fast changing and highly
dependent on the collaboration of different companies along the value chain (Knab et al.,
2010). However, most energy utilities lack organizational structures and processes that
allow them to respond effectively to a rapidly changing environment (van Dinther,
Weidlich, & Block, 2006).
Even though smart metering and smart grid topics are currently heavily discussed in
the German energy market and important benefits from smart metering and smart grids
are expected, innovations are not pursued fast enough (Price Waterhouse Coopers
(PWC), 2008). As discussed above the systematic nature of smart-grid innovations is also
a key barrier for innovation activity. Smart metering innovations for example require the
meter producers, the energy grid providers, the energy producers and the local as well as
the national governments to act in an orchestrated fashion.
The setting of our case study was eight companies from both the energy and the ICT
sector. The participants included six energy utilities, a telecommunications provider, and
a telecommunications research institution. The energy utilities had a diverse background
in terms of size, product and service scope, and geographical reach. Some of the
participating companies were competitors, while others worked at different levels of the
value chain. The case study was set up as a working group with representatives of all
companies. Participants had a diverse background and came from R&D and innovation
management, product development and sales, network operations and smart energy pilot
Application of the collaborative business modelling approach
The case study was conducted from April to October 2010 and spanned over three
workshops supplemented by additional research between workshops. The participants
also shared internal knowledge and research results from their respective organizations.
The research conducted between workshops consisted mainly of interviews and desk
research. The research was used to revise and detail the output from previous workshops
and to prepare input for the upcoming workshop.
In the following, the implementation of the three steps of the CBM approach in this
case study is explained. Figure 2 highlights some of the methods used within the
respective step.
Figure 2: The Collaborative Business Modelling process
Idea generation
In the first phase, the focus of the exercise was on generating many options and building
blocks for smart-grid business models. As it was the first meeting of the participants of
the working group who came from very different backgrounds, it was very important to
create trust within the group by getting to know each other and share expectations
towards the collaboration.
Before the group started the idea generation, there was an introduction to the smart
energy market and the methodological approach. Both sessions were followed by time for
group discussions to start synchronizing the participants’ views on the market
opportunities and harmonising terminology. At the same time, these steps supported the
creation of an atmosphere of openness and trust among the participants.
After formation of groups, the actual idea generation process started with the
brainstorming of potential building blocks of smart-energy business models. Building
blocks were developed without looking at how they fitted together or how realistic they
were. The focus was on quantity, creativity and novelty.
In the next step, the brain-writing technique was used to start putting building blocks
together and develop smart-energy business models. For this, the participants were
Idea generation Prioritisation Validation
!Brainstorming of possible
building blocks for business
!Development of business
models from the building
blocks using brainwriting
!Prioritisation of business
models according to expected
return and needed effort
!Creating a common
understanding of the market
!Validation of selected
business models
!Planning joint development
and commercialization
Collaborative business modelling for systemic and sustainability innovations 8
divided into groups of six. In these groups, the participants worked individually on
business model canvas. After having filled in a couple of building blocks, the person gave
the canvas to the next participant of the group who extended the business model. This
continued until everyone had contributed to all business models of the group.
At this stage, novelty and creativity were still the focus. However, we also started to
ask the participants to assess the interrelations between the business model elements. The
business models were then assigned to individuals who checked them for consistency and
made a first assessment concerning feasibility. All business models were then discussed
in the groups and the two business models that came out as favourites were presented to
the other groups.
This exercise resulted in 21 draft versions of business models. In the phase until the
next workshop, the models were then described in further detail through desk research
and virtual collaboration.
The prioritisation workshop started with a discussion on trends and expected changes in
the emerging smart-energy market to create a common outlook for the future. The trends
were derived from a compilation of different trend studies. This helped to create a
common understanding about the contingency factors that influence the business models
and also helped to create a common view on the market.
In the voting process for the business models, two dimensions were used:
‘attractiveness of and ‘effort to develop the business model. The dimension
attractivenessconsisted of four underlying factors:
Potential cost savings
Expected revenue
Influence on the company’s image
Fit with customer needs
For the evaluation of the effort dimension, three underlying factors were used:
Expected costs of implementation
Technical complexity
Organisational complexity
After introducing these criteria, all business models were visualized with their canvas and
displayed (in a market-place fashion) on the walls of the meeting room. Participants had
time to review and discuss the models with other participants. This ensured that
participants were aware of all business models, the decision criteria and they thus already
then started reviewing the models according to these criteria.
Each business model was then briefly presented. After clarifying questions regarding
the comprehension of the model, there was room for discussion. The discussion was
followed by a voting on the attractiveness of the business model and the needed effort for
implementation using the above-mentioned underlying factors. The participants voted on
a three-point scale: ‘high’, ‘medium’ or ‘low’. The votes were discussed either if
requested by one of the participants, or if votes diverged by more than one step (i.e. at
least one participant voted high and at least one voted “low”). This allowed
consolidation of the expert opinions in a Delphi-analysis-like fashion, where divergent
opinions are discussed. To compare the business models, the votes were plotted in a
portfolio, which is shown in figure 3. Displaying the voting visually has the additional
advantage that the group can validate the ranking by comparing the position of the
models, which makes it very intuitive and normally triggers discussions and
Overall, six business models were ranked as very attractive’, ten were ranked as
interesting, and five were ranked as currently not interesting. Further conclusions can
be drawn from the results of the prioritisation process when looking at the results in a
little more detail.
More than half of the business models were rated with a high effort needed for
implementation and only two were rated with low effort. This shows that many business
models in the smart-energy market require rather large changes in companies and high
efforts in terms of investment and technology needed. On the other hand, only five
business models had low expected results. Thus it can be said, that the innovation
opportunities were judged on average as very attractive. But at the same time pursuing
the opportunity might be discouraged by the expectation of high development effort.
Figure 3: Forcing decisions through a prioritisation scheme.
In a collaborative business modelling (CBM) project, the questions Which business
models should be implementedand in what sequenceare not fully addressed, as this is
a management decision, which needs to be taken by the individual organization.
However, the participants shared one conclusion, which was that it would be advisable to
develop a portfolio of high effort and low effort business models. From the high-effort
business models only the ones with the highest expected results should be pursued.
Additionally, low-effort and medium attractiveness business models, such as models 8 or
17 in figure 4, can be used as “quick wins”. They were expected to generate value
relatively fast and with a smaller effort compared to other models. They could also be
used as market entry models to gather first experiences in the new smart energy market.
Collaborative business modelling for systemic and sustainability innovations 10
The business models, which were ranked highest in the second step, were validated in the
third and last step. The basis for the validation was desk research, expert feedback and
discussions in the working group. Each building block of the proposed business model
underwent this process and was labelled as available/realistic(green), uncertain/to be
developed(yellow) or not available/potential show-stopper (red). An example of the
result of the validation is shown in figure 4.
If a business model contains red building blocks, it needs to be reviewed to see if the
red building blocks can be substituted or if it can be expected that the red ‘show-stopper’
building block might become available in the future. In general, the dominant colour of
the canvas (green or yellow) already gives a first visual indication of the feasibility of the
business model and thus facilitates strategic discussions.
Figure 4: Validation of business models.
In the second part of the third workshop, the participants developed general
recommendations and concrete action steps for each of the validated business models.
The general recommendations included a list of show-stoppers and enablers that are
relevant for most business models. Action steps on the business-model level were
developed in small groups and then also discussed in the whole group to share ideas and
capitalize on all different backgrounds of the whole working group.
After finalizing the business models, room was given to discuss next steps and how to
continue the collaborative innovation process. That led to some concrete collaboration
projects and a joint list of policy recommendations to overcome the regulatory and
legislative barriers that prevent smart-energy business models.
Block T
Key Partners Key Activities Value Propositions Customer
Cost Structure Revenue Streams
Key Resources Channels
Block A Building
Block N
Block O Building
Block D
Building Block S
Block H
Block C
Building Block K
Block U
Block J
Block R
Building Block
Block G
Building Block F
Block M
Building Block
L Building
Block Q
Building Block B
Building Block E
Block P
green Available/realistic yellow Uncertain/to be developed red Not available/show stopper
Evaluation of the approach
To evaluate the approach, we built on the feedback we received and on our own
reflections from comparisons with other approaches, which we have used earlier. These
approaches were primarily used in market exploration projects and involved using the
scenario analysis and roadmapping method (Heger & Rohrbeck, 2012).
Overcoming the general barriers to innovation
Firstly we wanted to assess if the approach helped to overcome the general barriers to
innovation. These include insufficient thinking out-of-the-box due to daily routines, the
lack of willingness to work with external partners, the resistance to challenge basic
assumptions and the lack of persistence in driving innovation (Rohrbeck, Döhler, &
Arnold, 2009). Figure 5 shows how the approach has contributed to overcome these
general barriers to innovation:
Figure 5: Three steps of the collaborative business modelling process.
1. In the first step, the approach helped to start unlocking barriers of innovation by
enhancing creativity. In addition, group dynamics were triggered, including building
trust among participants and preparing them to work jointly on innovative ideas. On
a practical level, different creativity techniques were used to create a multitude of
ideas on potential business model elements.
2. In the second step, the portfolio ranking method was used to force decisions. This
was prepared on a group level by reviewing the key trends, which in turn created a
common understanding and common terminology within the group. On a practical
level, the following criteria-based ranking allowed the group to create a shared
prioritization of the business model candidates.
3. The third step has its strength in preparing the implementation of business models.
On a group level, this step allowed the identification of development activities that
Collaborative business modelling for systemic and sustainability innovations 12
need to be addressed jointly by multiple participating companies. On a practical
level, the step allowed a thorough validation of the business model.
Overcoming the specific barriers of sustainability innovations
At the offset, we expected CBM to facilitate strategic conversation and innovation
planning for sustainability innovations that are characterized by a high degree of
uncertainty and a systemic nature. These characteristics are present in many sustainability
innovations such as e-mobility, i.e. electric-propulsion vehicles, (Johnson & Suskewicz,
2009) and in our case, the smart-energy business models.
The starting point from the participants’ point of view was that they all had done
analyses and developed concepts on the future of the smart-grid market from the
perspective of their organizations. The outcome of these analyses had mostly been (1)
that they had been overwhelmed by the complex system of the interdependencies that
resulted in (2) a lack of willingness to approve substantial investments by the top
management, and (3) that the uncertainty did not allow them to create a business case that
would suffice to ask for a top management decision.
These reported barriers matched with the barriers, which we discussed in our
literature analysis to be particularly challenging in complex sustainability innovations.
When comparing the situation of the participating firms before and after the CBM, we
can identify four strengths of the approach:
Dealing with uncertainty, through three mechanisms: First through a real reduction
of uncertainty by sharing information across organizations. All participants came
with some knowledge about factors that may influence the future development. By
sharing these insights, a more holistic and reliable picture was created. Second, the
participants realized that all interested parties were affected by the uncertainty and
when obtaining more information through their sharing of their individual insights,
they now felt to have a competitive advantage against organizations outside the
group. Third, they enhanced their understanding about factors that prevent the
emergence of the smart-energy market and could for example formulate policy
recommendations to promote the market development without the need to predict the
market development trajectory in detail.
Finding creative solutions: Most participants had done extensive analyses in their
organizations and overall had the feeling that they had well understood what can and
cannot be done to promote the market. However, by bringing together participants
with diverse backgrounds and by using creativity techniques, ideas and solutions
emerged that had not been identified before. This confirms the expectation that
designing winning business models is an inventive process (Sosna et al., 2010; Zott
& Amit, 2010) that, if successful, creates virtuous cycles that reinforce the
competitive value of the business model (Casadesus-Masanell & Ricart, 2010). The
different backgrounds of the participants reduced the barrier of ‘limiting the ideas by
the current assets of the firm’ (Chesbrough, 2010), and allowed to find creative
solutions to strategic paradoxes (Smith, Binns, & Tushman, 2010) and also to break
away from the organizational memory that might stand in the way of creation
(Govindarajan & Trimble, 2011).
Facilitating a strategic discussion about business models through which benefits are
not only identified from the perspective of the focal firm, but also from a societal
perspective (Doz & Kosonen, 2010; Laszlo, Laszlo, & Dunsk, 2010), including their
impact on sustainability goals (Thompson & MacMillan, 2010). It has been argued
before that value cannot only be created by individual firms, but also through
multiple firms that engage in a collaborative entrepreneurship (Miles et al., 2006).
The level of detail of the business model canvas seemed to work particularly well to
discuss and create shared visions thus creating promising expectations about the
emerging market (McDowall & Eames, 2006). This can be seen as a first step in
unlocking the barrier of unwillingness to allocate sufficient resources to develop the
The building block level also allowed to start the innovation planning. Participants
were particularly pleased by the possibility to tie detailed feasibility analyses to the
individual elements of the business models. After classifying the elements in green
(available/realistic), yellow (uncertain/to be developed) and red (not
available/potential show stopper), the groups identified actions that needed to be
taken in order to transform red or yellow building blocks into green ones. Some of
these actions were in the scope of what the participants could do themselves and
others were transformed into recommendations to policymakers or joint actions.
Overall it can be said, that CBM can contribute to understanding the systemic nature of
sustainable innovations. It can create a more holistic picture of how a new value
creation/value capture system can emerge and allow the identification of actions designed
to promote and develop a more sustainable future.
Limitations and obstacles of the CBM approach
Our project was focussed on creating visions about how the market might develop and to
create value-creation architectures. In future research it would be interesting to choose a
case where joint value-capture is also part of the project in order to be able to assess also
the strength of CBM for the implementation of new business models. We were therefore
not able to establish if CBM can support the voluntarily and emergent processes that are
associated with the evolution of business models (Demil & Lecocq, 2010).
One obstacle of the approach could be the required time. Particularly the need for
three full-day workshops will prevent firms to engage in such activities frequently.
However, the relatively high time consumption will also work in a positive way as it will
ensure the participation of only organizations that have a sufficiently high expectation
about the outcome of the approach and a sufficiently positive view on the potential value
from the systemic innovation. Continuous participation is also promoted by the provision
of intermediate results after each workshop, which allows participants to bring valuable
insights to their organizations throughout the whole process.
Comparison with alternative methods and approaches
The different frameworks for collaborative exploration of new markets have particular
strengths and weaknesses. Overall, it can be said that the scenario technique is very
suitable for creating an image of future developments and facilitating strategic
discussions (Ringland, 2010). Roadmapping has its strengths in planning, enforcing
Collaborative business modelling for systemic and sustainability innovations 14
decisions and identifying interdependencies between market and technology (Phaal et al.,
2004b; Phaal et al., 2004c; Thom et al., 2010). The CBM approach facilitates planning,
implementation and decision-making when dealing with sustainability innovations and a
high level of both complexity and uncertainty.
Due to the different characteristics, the optimal usage of the frameworks depends on
the given task. It is important to select the most suitable framework according to the
given situation and the expected results. We believe that if the whole innovation process
should be covered, all three frameworks can be appropriately used at different stages of
the innovation process.
In the case of sustainability innovation, the following combination of the different
frameworks to a “collaborative business field exploration process” can be suggested.
Through the scenario technique, different images of the future can be developed.
Participants get a concrete idea of how the market might develop. It is a very broad
approach and includes environmental conditions, which are not directly connected to
the examined market. It creates an understanding of the future rather than being a
planning tool. This broadens the horizon of the participants while making the future
development more concrete. The scenario technique profits greatly from
collaborative work and different backgrounds and experiences of the participants. In
a first step of collaborative business field exploration, it can be used to set the frame
for a brainstorming process by triggering ideas for relevant business models of the
Roadmapping creates a more detailed frame of the future. It shows a way to one or
more desired or expected future scenarios. It answers questions such as when certain
technologies are expected to be available, which rules and laws apply at which point
and how these milestones are based on each other. It gives an indication about
needed competencies and necessary steps, but does not yet go into the details of
individual products or business models. Rather it breaks down a scenario that is
expected in year X to milestones along a timeline leading to this scenario. This can
be useful to be aware of the development of a market and later refer back to this
timeline to place business models along it.
Using CBM as a third step strengthens the business perspective and facilitates the
transition from planning to implementation (Richardson, 2008). Building on the
expectations from scenario analysis and roadmaps, CBM is used to create and
validate value creation and value capture systems. CBM therefore also answers the
crucial question of how the individual organization will profit from creating the
market. Through the business model, the answers can be given on a conceptual level,
which will sidestep the question of the monetary benefit. But the conceptual answer
might be sufficient for organizations to take substantial investment decisions.
We have argued that a CBM approach can be used to create sustainability innovations,
especially if a new market or a value creation/value capture system needs to be created.
We have concluded from the case that in a context with a high level of uncertainty, CBM
carries the benefit of staying on an architectural level. In that way the compelling
business logic can be presented without the traditional business case. The approach has
been described, discussed and evaluated on the basis of the participantsfeedback,
through comparison to alternative methods (scenario analyses and roadmapping) and
through comparing expected and actual benefits from the method.
In the case study we have shown that the CBM approach can support the joint
development of business models, particularly for sustainability innovations, where
pooling of complementary skills, technologies and assets as well as an orchestrated
implementation are needed. Results from the case study show that CBM between actors
along the value chain can contribute to create a common understanding of drivers and
barriers as well as creating a common view on how the market might function in the
future (Baden-Fuller & Morgan, 2010). This also opens the opportunity to co-create
business models and value networks (Koen, Bertels, & Elsum, 2011) that are operated
jointly by industrial firms and non-governmental organizations (NGOs) operating on non-
profit business logics (Dahan, Doh, Oetzel, & Yaziji, 2010). From an innovation system
point of view, CBM can support an economy to adapt to sustainability objectives by
facilitating the collaboration of multiple organizations (Ulhøi, 2008).
Our study revealed that by building trust and identifying mutually benefiting business
models and by enabling participation of the different organizations, fertile ground for a
future implementation has been created. The building of trust matters also because
divergent goals and interests can be expected to hamper the willingness to develop
systemic innovations and thus might prevent the successful development of sustainability
innovations (Ruohomaa & Kutvonen, 2010).
The successful implementation of the CBM approach will also require that the
participants commit to share valuable insights, complementary skills and assets and
commit to an open-innovation paradigm. Our study could not reveal to what extent
sharing of skills and assets would have occurred, but the amount of shared insights (such
as internal reports, open discussions about expected future development) is particularly
remarkable as some organizations are direct competitors. This might be explained
because business modelling strongly facilitates strategic discussion and thus contributes
to the forming of teams consisting of the participants from competing firms (Hoegl &
Gemuenden, 2001). Also the usage of brain-writing, where everyone contributes in
private (i.e. through writing on the canvas) might decrease the perception that corporate
secrets are communicated.
In this article we have (1) given a detailed description on how to conduct CBM, (2)
discussed the strengths and limitations, (3) confirmed the applicability of CBM for joint
market development, and (4) framed CBM as an important innovation management tool
for systemic innovations.
By discussing the case of smart energy systems, we also contribute to the discussion
on how innovation management has to be enhanced to work in highly uncertain
environments, in innovation fields that are characterized by a high-level of
interdependencies, and to allow integrating societal value creation as a desired outcome
(Seelos & Mair, 2007).
We hope that we have motivated a broader discussion on which innovation
management tools are needed to identify, plan and develop sustainability innovations. We
believe that governmental and industrial actors need common platforms to discuss, plan
and execute joint initiatives and thus overcome the barriers that prevent the development
of effective policies and sustainability innovations.
Collaborative business modelling for systemic and sustainability innovations 16
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Biographical information
René Rohrbeck is Associate Professor of Strategy at the Aarhus University. His research
interests are organizational change, strategy as practice, innovation management and
corporate foresight.
He has 6 years of practical experience in the ICT and automotive industry, where he
worked for Deutsche Telekom and Volkswagen on strategic management, innovation
management and corporate foresight. In addition he has served as consultant for various
companies in the ICT, automobile, luxury goods and energy industry.
René Rohrbeck's teaches strategic management, innovation management, corporate
foresight and technology management on MBA, Master and Bachelor level.
Lars Konnertz works as a logistics coordinator for Greenpeace Germany. He studied
mechanical engineering and management at the TU Berlin where he specialized in
renewable energy. During his studies he worked at the energy business group of the EICT
where he participated in the development of the collaborative business modeling
approach. Later he worked in the wind energy industry where he developed a procedure
for multi-plane balancing of wind turbine drive trains.
Sebastian Knab is a research assistant at Universität Hamburg, Chair of Business Ethics
and Management. His research interests include innovation management and ethics,
strategic management, sustainability and energy management.
Before joining Universität Hamburg he was a project manager for innovation
management at the EICT for 3 years and a research assistant at Technische Universität
Berlin, Chair of Sustainable Electric Networks and Sources of Energy. At the EICT he
established the energy business group where he successfully conducted consultancy and
research projects on innovation planning, corporate foresight, business modeling and
roadmapping mainly in the energy and telecommunications industry.
... CSBM is a subfield within SBM literature that has an inter-organizational design approach with the aim of creating multiple types of value for multiple actors within the ecosystem (Mäkinen and Dedehayir, 2012). The approach entails a participatory process in which business models are adapted, leading to intertwined, aligned business models and long-term contracts for doing business within the ecosystem (Rohrbeck et al., 2013). The focus on multiple value creation means that businesses proactively create value for society by finding profitable solutions to social or ecological challenges (Masud et al., 2019). ...
... In phase 2, we combined the scaling and CSBM tools in an initial 5step framework: 1) discovery, 2) strategy, 3) adaptation, 4) evaluation, and 5) implementation. The steps were inspired by Geissdoerfer et al. (2016), Mlecnik et al. (2019) and Rohrbeck et al. (2013) who identified five essential steps in the CSBM process based on design thinking: the generic design thinking process starts with analysis of the current situation, followed by ideation of new ideas, adjustment of these to the current situation, validation based on a set of criteria, and development of an implementation plan. Each of these steps was linked to suitable tools listed in Table 2. Fig. 2 summarizes all five steps, the literature on which each step is based, and the actions to be executed by the participants. ...
... The participants in the Waste Management Bali workshop, for instance, started to generate ideas for strategies focused on increasing community involvement because the community was identified as a key actor, even though community members were not represented directly. In this way, participants actively focused on how actors' resources and activities can benefit the whole business ecosystem rather than solely addressing aspects in the direct influence of a single organization (Rohrbeck et al., 2013;Gradl and Jenkins, 2011). Third, the participants determined what adaptations a scaling strategy requires in the overarching and individual business models to be successfully implemented. ...
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... By looking at problems from a collective perspective, stakeholders can take coordinated action and allocate the necessary resources while ensuring equitable sharing of costs and benefits [43], thereby creating value for the whole value network [15]. Ideally, all actors of the value network participate in the CSBMing process, leading to intertwined, aligned business models and long-term contracts on how to do business within the value network [44]. In order to deliberately change value networks, it is important to understand the processes through which these different system levels can be influenced. ...
... By looking at problems from a collective perspective, stakeholders can take coordinated action and allocate the necessary resources while ensuring equitable sharing of costs and benefits [43], thereby creating value for the whole value network [15]. Ideally, all actors of the value network participate in the CSBMing process, leading to intertwined, aligned business models and long-term contracts on how to do business within the value network [44]. ...
... Various approaches have focused on CSBMing [44][45][46][47][48][49][50][51][52][53]. Although these approaches vary in maturity and scope, each approach describes a learning process consisting of steps to come to a mutual value creation, capture, and delivery system in order to build mutual beneficial value propositions and prevent contradictory incentives in the value network [54]. ...
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... Rather, it should be understood as a proposal for a new understanding of BM by breaking down the continuum of DT into discrete, conceptually different manifestations that are better suited for investigation and understanding. Secondly, a classification can simplify cognition and facilitate effective communication among actors engaged in collaborative efforts, whether researchers or practising managers (Rohrbeck et al., 2013;Gassmann et al., 2015). Thirdly, wellordered knowledge provides the basis for midrange theorising about the forces at work within specified manifestations of DT and allows practitioners and researchers to formulate and test contingent hypotheses (Lambert, 2015;Rich, 1992). ...
Conference Paper
For a long time, business models and business model innovation has received increasing attention. Recently, a new phenomenon regarding transformations enabled by digital technology has emerged. In this paper, we propose a way to unpack the notion of digital transformation along with different dimensions of transformation.
... These were in component diagram form [104]. This process of rapid prototyping is central to human centred design, and is also reflected in the business model innovation literature [105,106]. Fig. 5 shows the business model descriptions. ...
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This paper brings together socio-technical transitions theory with strategic foresight and human centred design. The aim is to bring in new methods for analysing the business model element of sustainability transitions. We propose a process for doing business model innovation work. Business models have become a key area of focus, particularly in the energy sector. Recent work shows how the development of new business models co-evolves with elements of the energy system, either driving technological innovation, changing user practices or placing pressure on the institutional or policy regime. At the same time, there is no recognised process for business model research aimed at transition management. It is time therefore to propose a more formalised and theoretically grounded approach to business model innovation work. We use this contribution to synthesise the lessons of a four-year research project centred on energy utility business models with industrial, commercial and government stakeholders. We describe the process adopted, and insights this process generated. We seek to establish this process in the literature, invite others to utilise it, adapt it and critique it.
... According to Adams et al. (2016), sustainability-oriented innovation is related to changes in philosophy, organisational values, products, processes, and practices to meet the specific purpose of creating social and environmental value, in addition to economic returns. Ritala et al. (2018) stated that the business model approach has been increasingly contemplated in discussions of corporate sustainability, and some authors have posed sustainability-driven innovation as a challenge for business models (Rohrbeck et al., 2013;Adams et al., 2016). For Agwu and Bessant (2021), re-evaluating business models and including sustainability is the key to long-term success, good moral positioning, and profitability. ...
This study aimed to analyse the relationship between adopting sustainability-oriented innovation practices and the business models of Brazilian industrial companies. A quantitative study was conducted using a 109-question survey with companies that benefited from the Lei do Bem (Law of Good), and quantitative data analysis was performed by structural equation modelling. The results indicated that sustainability-oriented organisational innovation, product innovation, and innovation practices positively influenced the companies’ business models. By addressing sustainable innovation in the context of the business model of industrial companies, this study contributes to reducing the negative socio-environmental impacts inherent to industrial activities and inserts sustainability through innovation into their business models.
Despite the recent rise of complex businesses which are becoming increasingly less linear and more circular, visualizing the value created and captured by different stakeholders in a business ecosystem remained an issue. In this paper, the authors propose to address this gap by introducing a new business model design instrument, the value creation ecosystem (VCE), which allows for a simple visualization of the key value exchanges and/or value capture occurring amongst the main stakeholders within an ecosystem built to create and deliver a specific value proposition to an end-user. The VCE concept and its functionality are then described in the context of an electricity system-based business model that was explored as part of a Horizon2020 project, EU-SysFlex, which aimed to improve and solve technical issues that would arise as renewable energy shares in the European grid network and increase to 50% by 2030.
This study investigates sustainability-oriented innovation (SOI) in the agri-food sector, which is one of the most influential industries in a country, through empirical analysis involving patents. Specifically, the causal relationship between SOI outputs and economic performance in the agri-food sector, as well as the moderating role of co-patenting, are investigated. Economic performance is measured based on firms’ production value and EBITDA growth. SOI is evaluated using SOI patents, that is, patents that refer to SOI concepts, as defined in the literature. After a general investigation involving 1,938,355 patents (the number of patents in the agri-food sector from 2000 to 2019), the panel data regression models demonstrate that in the agri-food sector: (1) SOI outputs are related to economic performance, measured as production value growth and EBITDA growth, and (2) co-patenting moderates specific circumstances. Thus, the results confirm that economic performance and SOI outputs are linked. Moreover, to increase firms’ economic performance, it may also be important to increase the development of joint patents in the agri-food sector.
Full-text available
Mounting sustainability pressures challenge established firms to engage with sustainability innovations, which are often introduced by startups. Research on alliance learning has established the potential of learning from startups to advance corporate innovation. Here, scholars have outlined alliance learning processes and outcomes and have distinguished learning about and learning from alliance partners as two key learning types. The saliency of learning from the operational alliance process is stressed. To date, however, no study has investigated alliance learning processes and outcomes for sustainability innovations. This is despite the fact that sustainability research suggests learning processes in the sustainability context have a distinct nature. This study addresses this research gap by analyzing the sustainability-specific learning processes and outcomes of a large established meat firm's alliances with nine startups for sustainable plant, insect-based and cell-based protein solutions. We (1) identify three distinct characteristics of sustainability-related alliance learning processes and outcomes, and (2) specify the temporal occurrence and outcomes of learning types in alliance learning phases. In contrast to findings of prior research, our study reveals that learning about alliance partners is of key importance throughout the whole sustainability-oriented alliance learning process. In addition, the findings highlight that alliance learning outcomes may support an established firm's contribution to the sustainability transformation of mass markets.
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An extensive body of literature indicates the importance of teamwork to the success of innovative projects. This growing awareness, that "good teamwork" increases the success of innovative projects, raises new questions: What is teamwork, and how can it be measured? Why and how is teamwork related to the success of innovative projects? How strong is the relationship between teamwork and various measures of project success such as performance or team member satisfaction? This article develops a comprehensive concept of the collaboration in teams, called Teamwork Quality (TWQ). The six facets of the TWQ construct, i.e., communication, coordination, balance of member contributions, mutual support, effort, and cohesion, are specified. Hypotheses regarding the relationship between TWQ and project success are tested using data from 575 team members, team leaders, and managers of 145 German software teams. The results of the structural equation models estimated show that TWQ (as rated by team members) is significantly associated with team performance as rated by team members, team leaders, and team-external managers. However, the magnitude of the relationship between TWQ and team performance varies by the perspective of the performance rater, i.e., manager vs. team leader vs. team members. Furthermore, TWQ shows a strong association with team members' personal success (i.e., work satisfaction and learning).
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The bottom of the pyramid (BOP) in the global distribution of income has been promoted as a significant opportunity for companies to grow profitably. Under the BOP approach, poor people are identified as potential customers who can be served if companies learn to fundamentally rethink their existing strategies and business models. This involves acquiring and building new resources and capabilities and forging a multitude of local partnerships. However, current BOP literature remains relatively silent about how to actually implement such a step into the unknown. We use two BOP cases to illustrate a strategic framework that reduces managerial complexity. In our view, existing capabilities and existing local BOP models can be leveraged to build new markets that include the poor and generate sufficient financial returns for companies to justify investments.
Im Energiesystem der Zukunft wird ein intelligentes Netz (Smart Grid) Angebot und Nachfrage effizient steuern. Dieser Artikel beschreibt (1) die Trends und Herausforderungen heutiger Ener-giesysteme, die die Entwicklung eines Smart Grid auslösen, identifiziert (2) Elemente eines Smart Grid und stellt (3) die mögliche Rolle eines Telekommunkationsunternehmes im entste-henden Smart Grid Markt dar. Der Trend zu einem steigenden Anteil erneuerbarer und dezentraler Energieerzeugungsanlagen bringt zwei große Herausforderungen mit sich: Eine mangelnde Vorhersagbarkeit und eine man-gelnde Regelbarkeit der Erzeugungsleistung. In diesem Artikel werden vier Elemente eines Smart Grid vorgestellt, die diese Herausforderungen adressieren: Virtuelle Kraftwerke, Demand Side Management, Lastflussregelung und Energiespeicherung. Abschließend wird herausgestellt, dass die Elemente systemisch integiert werden müssen um den eigentlichen Wert des Smart Grid zu heben. Es wird erörtert, dass sich Telekommunkiationsan-bieter in einer guten Ausgangsposition befinden um die Herausforderungen dieser Integration zu adressieren, da sie über wesentliche Erfahrungen und Fähigkeiten verfügen: Umfassendes Ver-ständnis großer IP-Netzwerke, Erfahrungen mit Cloud Computing, umfangreiches Wissen zu Service-Plattformen und Kooperationserfahrung. Online-Version im Universitätsverlag der TU Berlin ( erschienen.
Technical Report
In this report we present a system of ten sustainability megaforces that will impact each and every business over the next 20 years.
Corporate Leaders have long subscribed to the belief that the sole purpose of business is to make money. That narrow view, deeply embedded in the American capitalist system, molds the actions of most corporations, constraining them to focus on maximizing short-term profits and returns to shareholders at the expense of worker safety and health, the environment, and society in general. In this article, HBS professor Kanter argues that a very different logic informs the practices of most high-performing and sustainable companies: An institutional logic. These companies believe that they are more than moneymaking machines; they are a vehicle for advancing societal goals. They deliver more than just financial returns; they also build enduring institutions. At great companies, institutional logic takes its place alongside economic logic in research, analysis, and managerial decision making. Six facets of institutional logic a common purpose, a long-term focus, emotional engagement, partnering with the public, innovation, and self-organization radically alter leadership and corporate behavior and form the building blocks of a more sustainable competitive advantage.
Companies, the authors argue, are increasingly turning toward business model innovation as an alternative or complement to product or process innovation. Drawing on extensive research they conducted over the course of the last decade, the authors define a company's business model as a system of interconnected and interdependent activities that determines the way the company "does business" with its customers, partners and vendors. In other words, a business model is a bundle of specific activities - an activity system - conducted to satisfy the perceived needs of the market, along with the specification of which parties (a company or its partners) conduct which activities, and how these activities are linked to each other. Business model innovation can occur in a number of ways: (1) by adding novel activities, for example, through forward or backward integration, (2) by linking activities in novel ways, or (3) by changing one or more parties that perform any of the activities. Changes to business model design can be subtle, the authors note; even when they might not have the potential to disrupt an industry, they can still yield important benefits to the innovator. The authors offer a number of examples of business model innovation and pose six questions for executives to consider when thinking about business model innovation: 1. What perceived needs can be satisfied through the new model design? 2. What novel activities are needed to satisfy these perceived needs? 3. How could the required activities be linked to each other in novel ways? 4. Who should perform each of the activities that are part of the business model? 5. How is value created through the novel business model for each of the participants? 6. What revenue model fits with the company's business model to appropriate part of the total value it helps create?
The concept of shared value—which focuses on the connections between societal and economic progress—has the power to unleash the next wave of global growth. An increasing number of companies known for their hard-nosed approach to business—such as Google, IBM, Intel, Johnson & Johnson, Nestlé, Unilever, and Wal-Mart—have begun to embark on important shared value initiatives. But our understanding of the potential of shared value is just beginning. There are three key ways that companies can create shared value opportunities: By reconceiving products and markets • By redefining productivity in the value chain • By enabling local cluster development • Every firm should look at decisions and opportunities through the lens of shared value. This will lead to new approaches that generate greater innovation and growth for companies—and also greater benefits for society. The capitalist system is under siege. In recent years business increasingly has been viewed as a major cause of social, environmental, and economic problems. Companies are widely perceived to be prospering at the expense of the broader community. Even worse, the more business has begun to embrace corporate responsibility, the more it has been blamed for society's failures. The legitimacy of business has fallen to levels not seen in recent history. This diminished trust in business leads political leaders to set policies that undermine competitiveness and sap economic growth. Business is caught in a vicious circle. A big part of the problem lies with companies themselves, which remain trapped in an outdated approach to value creation that has emerged over the past few decades. They continue to view value creation narrowly, optimizing short-term financial performance in a bubble while missing the most important customer needs and ignoring the broader influences that determine their longer-term success. How else could companies overlook the well-being of their customers, the depletion of natural resources vital to their businesses, the viability of key suppliers, or the economic distress of the communities in which they produce and sell? How else could companies think that simply shifting activities to locations with ever lower wages was a sustainable "solution" to competitive challenges? Government and civil society have often exacerbated the problem by attempting to address social weaknesses at the expense of business. The presumed trade-offs between economic efficiency and social progress have been institutionalized in decades of policy choices.
Billions of dollars worldwide are pumped into the search for clean technology and renewable energy. So far, however, most investment has been in companies that are using conventional business models to fit new technologies into existing systems. A far better approach, say Johnson and Suskewicz, is to create whole new systems. The authors propose a framework for thinking about clean tech that consists of four interdependent components: an enabling technology, an innovative business model, a careful market-adoption strategy, and a favorable government policy. Two recent experiments show how this framework can be applied: Better Place, founded by the software executive Shai Agassi, has a network of battery-recharging and -switching stations to support its electric cars and a business model based on selling electricity (miles) rather than vehicles. It has a foothold market in Israel, where gas-powered cars are taxed far higher than electric ones. Masdar City, now under construction in Abu Dhabi, will be a carbon-neutral incubator of clean technologies, supported by the investment, manufacturing, strategy, and academic units of a government initiative. The city is itself a foothold market and will benefit from government subsidies, "free zone" status, and favorable regulations. Both enterprises provide hope for supplanting the oil-based economy. Reprint R0911D
The technology roadmapping technique is used widely in industry to support strategic technology planning. Roadmaps can take various forms, but the most flexible and generic type comprises a multi-layered time-based chart that links technology and product developments to market needs. In recent years, the approach has been used in sector-level foresight programmes, particularly in North America. This paper provides a brief overview of the technology roadmapping approach, and describes the use of a process (''T-Plan'') for supporting the rapid initiation of the technique in organisations. The application of the method is illustrated by means of an automotive sector-level case study (the UK Foresight Vehicle technology roadmapping initiative), which highlights issues associated with customisation of the roadmapping approach, and the related communication and network development benefits.